by Andy Bruce

LONDON (Reuters) – Britain’s labor market proved much stronger than expected in the three months to April, data released on Tuesday showed, which could prompt the Bank of England (BoE) to continue its monetary tightening .

Britain’s unemployment rate, expected at 4.0%, fell to 3.8% in the three months to April, according to the Office for National Statistics (ONS), from 3.9% in the three months preceding March.

Employment, for its part, rose by 250,000 in the three months to April, while the Reuters consensus had forecast a rise of just 162,000.

The average weekly wage, excluding bonuses, meanwhile, rose 7.2% year on year in the three months to April, against a consensus of +6.9%.

On the markets, the pound sterling rose 0.42% to 1.2563 dollars after the publication of these data.

The April data is the first to include the impact of a 9.7% rise in the minimum wage and will no doubt be closely scrutinized by the Bank of England meeting next week.

BoE officials should no doubt note that employment and wage data beat all expectations, while the unemployment rate came in below expectations.

Before the publication of these data, the financial markets were expecting BoE interest rates above 5.5% in December, against 4.5% currently.

The two-year gilt yield, up five basis points to 4.694%, hit a high since Sept. 28.

(Reporting Andy Bruce; Claude Chendjou, editing by Kate Entringer)

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